BETTY ANN BOWSER, NewsHour correspondent: The nominee today made it clear he knows the scope of the challenge before him.

TOM DASCHLE, Secretary of Health and Human Services-designate: There is no question that fixing health care is and has been for many years our largest domestic policy challenge. We have the most expensive health care system in the world but are not the healthiest nation in the world. Our growing costs are unsustainable, and the plight of the uninsured is unconscionable.

BETTY ANN BOWSER: The former senator from South Dakota is not only the president-elect’s choice for secretary of health and human services; he’ll also lead a new White House Office of Health Reform.

TOM DASCHLE: Addressing our health care challenges will not only mean healthier and longer lives for millions; it will also make American companies more competitive and help pull our economy out of its current tailspin.

BETTY ANN BOWSER: Daschle is experienced and skilled in the ways of Congress, where he served nearly 30 years, 10 as a party leader. He was an early Obama supporter and a key campaign aide.

Since losing his Senate seat in 2004, Daschle has worked with a Washington law firm as a policy adviser and has pushed for health care reform.

BARACK OBAMA: Tom could not have a better partner in this work than Jeanne Lambrew. Jeanne brings a depth and range of experience on health care that few can match.

BETTY ANN BOWSER: Daschle’s deputy director in the new Office of Health Reform health reform will be Jeanne Lambrew, a former aide to President Clinton. They recently co-authored “Critical: What We Can Do About the Health Care Crisis.” The book examines previous reform efforts, why they failed, and presents overhaul ideas.

In rolling out his team today, Mr. Obama took note of the roadblocks Americans face in getting access to health care.

BARACK OBAMA: It’s hard to overstate the urgency of this work. Over the past eight years, premiums have nearly doubled, and more families are facing more medical debt than ever before.

Forty-five million fellow citizens have no health insurance at all. Year after year, our leaders offer up detailed health care plans with great fanfare and promise only to see them fail, derailed by Washington politics and influence-peddling. This simply cannot continue.

BETTY ANN BOWSER: Both Mr. Obama and Sen. Daschle stressed that, even though the country is in a recession, they intend to push hard for health care reform and believe it will take place.

BARACK OBAMA: Now, some may ask how, at this moment of economic challenge, we can afford to invest in reforming our health care system. And I ask a different question. I ask, how can we afford not to?

Right now, small businesses across America are laying off or shutting their doors for good because of rising health care costs. Instead of investing in research and development, instead of expanding and creating new jobs, our companies are pouring more and more money into a health care system that is failing too many families.

So let’s be clear: If we want to overcome our economic challenges, we must also finally address our health care challenge. I can think of no one better suited to lead this effort than the man standing beside me today.

BETTY ANN BOWSER: Daschle said he’s looking forward to returning to public service.

Daschle likely to engage Congress

Susan Dentzer

Editor, Health Affairs

It tells us that Senator Obama, President-elect Obama, is pushing ahead with the outlines of his plan, because Senator Daschle was very much in-sync with that.

JUDY WOODRUFF: For some perspective on the president-elect's agenda, team, and the political obstacles ahead, we turn to two people who have long chronicled the health care wars.

Susan Dentzer is editor-in-chief of the journal Health Affairs and an analyst on health policy issues for the NewsHour. She's in Nashville tonight.

And we hope to be joined by Julie Rovner, health policy correspondent for National Public Radio, stuck in traffic, but on her way here.

Susan, let me start with you. What does the choice of Tom Daschle say about what the president-elect has in mind for health care reform?

SUSAN DENTZER, editor, Health Affairs: Judy, I think it tells us a little bit about the substance of the proposal that could likely emerge and also about the process.

On the substance, Sen. Daschle has very much been in-sync with the kind of thinking that was evident in the Obama campaign plan on health reform, that is to say around such concepts as shared responsibility, everybody has to pay into the system, employers, individuals, the government, very much in-sync with the notion of health insurance exchanges being created.

At least one major exchange for the whole country or a number of exchanges, where private health plans could come in, compete to offer a standardized package of benefits. Employers and others would contribute funds to that. Individuals would contribute funds to that.

Essentially, people would be able to buy from a marketplace of insurance products, including potentially a new public health insurance plan along the lines of Medicare that would be in that.

So it tells us that Senator Obama, President-elect Obama, is pushing ahead with the outlines of his plan, because Senator Daschle was very much in-sync with that.

It also tells us something very important about the process, which is that, unlike what happened during the Clinton health reform, this is not going to be a plan that is cooked up in the White House and brought out and pushed on to Congress.

Quite the contrary, it's going to be a plan that emerges largely from the Congress. We know that key officials in Congress â?? Sen. Max Baucus, who chairs the Finance Committee, Sen. Ted Kennedy, who chairs the Health, Education, Labor and Pensions Committee -- are working together already on a plan.

It means that there's going to be very, very active engagement. So a plan that emerges will be a plan that has the leaders of Congress on the Democratic side anyway -- potentially even some Republican leaders in Congress -- as well as the president standing behind it and in a position to move it forward.

Health care, economic woes linked

Susan Dentzer

Editor, Health Affairs

Part of getting the economy moving again is to get this weight of enormous health care expenditures that don't achieve the value that we think we want to get out of health care off the backs of some of these companies and reform the system.

JUDY WOODRUFF: Well, what you just said I think raises an interesting question, because both Daschle and the president-elect talked today about how they want the process to be open, they want to listen to people. They said there are going to be thousands of meetings of citizens around the country.

But at the same time, they have something in mind. So which is it? Is this something they do largely have in mind or are they truly open to other ideas?

SUSAN DENTZER: I think they largely have the outlines of the plan in mind, and certainly it's the case that Senators Baucus and Kennedy do. Senator Baucus, after all, put out a 90-page white paper on the subject just a couple of weeks ago.

But the listening piece of it is real for a couple of reasons. It's real, first of all, in terms of actively engaging the public. There is clearly a sense â?? Senator Daschle said as much in his recent book -- there's clearly a sense that if you move -- if you get out too far in front of the public, you do so at your peril in this country, particularly about something that people take as seriously and as close to their hearts as their health care.

So it's real in the sense that they really do want to listen to people. They really do want to hear what people's ultimate desires are out of a reformed health care system. So that aspect of it's real.

Nonetheless, the outlines of the plan that they are thinking of, first of all, is very much along the lines not only of what Senator Obama has talked about, it's along the lines of what Sen. Hillary Clinton talked about during her campaign, and it's very much along the lines of what Massachusetts has put in place, not to mention even what former President Richard Nixon was talking about a number of years ago.

So these are ideas that have been percolating for a long time. And, frankly, the center seems to be gelling to a large degree around them.

JUDY WOODRUFF: But it still sounds like a lot of decisions yet to be made about what they're going to do. Susan, a lot of people are looking at this and saying, "It all sounds great. You know, everybody wants health care to be better, more accessible, but the economy is in terrible shape right now."

The president-elect said today that he views that as an opportunity, that he said you can't address -- that you must address health care in order to address the economy. How much do you think they're serious about that?

SUSAN DENTZER: They utterly, utterly believe that for a number of reasons. First of all, just look at the job loss situation. More than 500,000 jobs lost last month. A lot of those people -- if they're lucky, they have employer-based coverage and they can continue to buy it, even though they've lost their jobs, under a program called COBRA.

If they're not lucky, their company is gone. They can't do that. So we will see active increases in the uninsured numbers clearly this year. So that's No. 1.

No. 2, many, many companies, not just the automakers, are straining under the costs of just enormously high-priced health care. General Motors alone spent $5 billion last year on just its retirees' health care.

So everybody understands that part of getting the economy moving again is to get this weight of enormous health care expenditures that don't achieve the value that we think we want to get out of health care off the backs of some of these companies and reform the system.

So they very much believe that, if you will, in crisis there is opportunity at this point, that everybody's eyes now are fixed on the size of the problem, they understood how it's crippling many aspects of the economy and really hurting individuals, and that they really do need to move ahead.

Phased-in plan is most realistic

Susan Dentzer

Editor, Health Affairs

President-elect Obama's advisers are starting to acknowledge that, even though they hope that the reform process will get going this year, it clearly -- first of all, it will be a Herculean effort to pass it.

JUDY WOODRUFF: And yet there still is the political climate to deal with. I was just listening to a Republican argue why what the president-elect wants to do is wrong-headed, why they ought to do something much less ambitious. How do they read the political climate?

SUSAN DENTZER: Well, I think quietly. President-elect Obama's advisers are starting to acknowledge that, even though they hope that the reform process will get going this year, it clearly -- first of all, it will be a Herculean effort to pass it. As the cliche always goes, the devil is truly in the details.

It's one thing to talk about a plan and broad outline; it's another thing to get agreement on very technical details that are going to cost some people a lot of money and produce some instability in the system. There will be a long, long struggle to get any package enacted. There's no question about that.

Also, the advisers are fully apprised of the fact that, even if something were to pass this year, it will have to be phased in.

The costs of the Obama plan were priced out by people who were trying to do an honest cost estimate at $160 billion a year. There isn't $160 billion a year to be had on that. It would have to be borrowed. It would have to, in essence, be added to the budget deficit, if it were to be enacted this year.

So that's not going to happen. So the advisers are beginning to talk about a phased-in process, where even a large step to expand health care coverage probably would not come about until the economy began to recover.

So there's a sense of realism, I think, about this that may be belied by some of the very upbeat, happy talk that one sees in public. A lot of these folks are smart people. They've been around the block a number of times, especially on the budget.

Jeanne Lambrew used to be at the Office of Management and Budget. They're not cooking up any airy-fairy schemes of how this is going to be paid for.

'Excessive expectations' are a risk

Susan Dentzer

Editor, Health Affairs

I think, yes, there's the risk of the excess expectations. I don't think there's any risk that it's all going to happen real fast, because, frankly, at this point it can't.

JUDY WOODRUFF: And yet President-elect Obama was talking today about convening a meeting in Washington early, he said, in his administration to talk about what comes next. So could they possibly be raising hopes too high, given the political circumstances?

SUSAN DENTZER: Well, there's always very much that risk. And the effort now to sort of reach out to the public, have these town meetings, do a lot of social networking-type of outreach among the same core of people who supported Obama in the campaign, that always creates the risks of excessive expectations, and particularly on how fast things can move.

One building block that has to proceed this year is that the State Children's Health Insurance Program, SCHIP, has to be reauthorized. It could be at a minimum that that's what happens in 2009, that SCHIP is reauthorized and is a building block for some reform initiatives.

We also know that the Obama administration has signaled that big investments in health information technology -- that is to say, electronic health records and so on -- will be a part of the stimulus package that comes out of the administration right out of the block.

So it gives us a sense that this thing, if it happens, will happen in pieces. So I think, yes, there's the risk of the excess expectations. I don't think there's any risk that it's all going to happen real fast, because, frankly, at this point it can't.

JUDY WOODRUFF: All right, Susan Dentzer joining us once again. Thank you so much, Susan.

And our apologies that Julie Rovner of National Public Radio couldn't make it, bad traffic, bad weather this evening in Washington.

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